# Test 1b: Mediation — Structural Controls Attenuate Z₁

*If confounders drive the pre-opening Z₁ effect, adding structural controls should attenuate Z₁ more in pre-opening than post-opening.*

| Period | Z₁ (baseline) | SE | p | R² | Z₁ (+structural) | SE | p | R² | Attenuation | N |
|:---|---:|---:|---:|---:|---:|---:|---:|---:|---:|---:|
| Pre-opening | 177.847* | (100.328) | 0.079 | -0.088 | 21.750 | (98.160) | 0.825 | 0.147 | 87.8% | 110/73 |
| Post-opening | 62.222 | (72.695) | 0.393 | -0.130 | 68.222 | (75.842) | 0.369 | -0.080 | -9.6% | 310/288 |

**Pre-opening attenuation: 87.8%. Post-opening attenuation: -9.6%.**
*Greater attenuation pre-opening → confounders drive pre-opening Z₁ effect.*

*Baseline: ca_gdp ~ Z₁ Z₂ Z₃ + fiscal_bal_gdp + nfa_gdp_lag + trade_openness + log_rel_opw.*
*+Structural: adds rule_of_law, control_corruption, gross_savings_gdp, fdi_liab_gdp.*
*Transition economy openers only. PanelGLS with entity and time effects.*